Key Takeaways
- Cryptoquant’s CEO expects a smaller bitcoin rally and a milder bear market.
- His analysis points to stronger holder profitability and fresh capital.
- Institutional ownership could reshape bitcoin’s historical price cycles.
Bitcoin’s Return Potential Comes With a Different Trade-Off
Bitcoin investors could face smaller cycle gains alongside shallower losses as institutional ownership expands, according to Ki Young Ju, founder and CEO of Cryptoquant, a cryptocurrency analytics platform. In his Sept. 22 bitcoin cycle forecast on X, he argued that a larger market is reducing the extremes associated with earlier speculative booms.
Ju stated:
“I expect this bitcoin bull cycle to deliver 3–5x rather than another 10x+ parabolic rally, followed by a milder bear market.”
“When Bitcoin was smaller and retail dominated, hot money fueled explosive rallies and 80% crashes. Today, a much larger market and growing institutional ownership are dampening both extremes. The same forces that limit the upside also soften the downside,” he explained.
Ju’s outlook aligns with Fidelity Digital Assets’ historical analysis, which documented bitcoin’s declining volatility in May 2024. The financial giant explained that capital entering a larger market should have a smaller price impact. Its research documented declining volatility over time while distinguishing historical correlations from evidence that a particular price outcome must follow.
Holder Profitability Supports Ju’s Outlook
Ju’s assessment draws on a profitability index that he says shows less extreme peaks and increasingly resilient cycle lows. The profit-and-loss, or PnL, index tracks aggregate holder profitability. He also highlighted a developing turn in its 365-day moving average, a slower-moving measure that smooths short-term fluctuations and typically responds after market conditions begin changing.
The chart compares bitcoin’s price in gray with the index’s 365-day moving average in purple. Recent profitability peaks are lower than earlier cycle highs, supporting Ju’s argument that market extremes are moderating. However, the purple line remains below zero and is still declining at the chart’s right edge.
The analyst reported that bitcoin remained above holders’ average onchain cost basis even at this cycle’s lows. He cited the market-value-to-realized-value ratio, which compares market capitalization with a valuation based on coins’ last onchain movements, staying above one. In his interpretation, some investors absorbed losses while the holder base collectively remained above its estimated acquisition cost.
Bitcoin’s historically low volatility is more closely associated with long-term holder supply than with market size, according to Glassnode. Its Sept. 8 analysis identified long-term holder supply as the strongest explanatory variable among those examined, accounting for nearly 19% of detrended volatility variance. Market capitalization explained approximately 3%, illustrating that market size alone offers an incomplete explanation for price stability.
Institutional Demand Could Reshape Bitcoin’s Cycles
Ju identified rising realized capitalization, a halt in selling by longstanding large holders, and substantial bullish futures positions as supporting signals. He interpreted rising realized capitalization as fresh capital entering the market and reported that large futures traders built long positions near the bottom.
His latest argument follows an earlier forecast that international institutional demand and ETF access could shape bitcoin’s cycle peak. In August, Ju highlighted markets where regulated investment access remained limited. He expected broader fund availability, deeper stablecoin liquidity, and financial infrastructure using tokenized assets to support participation beyond the United States.
Recent wallet data provide another view of ownership changes, with two smaller-holder groups shrinking by 69,494 addresses before bitcoin’s recovery above $85,000. Santiment associated the July-August contraction with capitulation. Those figures describe changes in address balance categories, rather than establishing that an equivalent number of individual investors left bitcoin.
Ju remarked:
“Giving up the 10x parabola also means giving up the 80% crash, and that is exactly what invites patient, long-horizon capital instead of hot money.”
Lower volatility, the speed and extent of price changes, is central to Ju’s longer-term argument about adoption. His broader thesis extends beyond returns: greater stability could eventually make bitcoin more practical for use as money.
